Mitigation

Climate public expenditure and institutional reviews (CPEIR) have been carried out in a number of Asian countries, with several others well underway in Africa and Latin America. These studies help countries to align national climate policies with national development policies and budgets. They also indicate that very significant levels of national spending are already contributing towards addressing climate change.

Building upon the UNFCCC's global, top down analysis of the costs of climate change, UNDP commissioned a User Guidebook to support developing countries to undertake a bottom-up, national sectoral analyses of the costs of adapting to the impacts of climate change and mitigating GHG emissions. The User Guidebook, which was developed by UNDP with a group of international experts and regional centres of excellence, comprises:

The guide book offers a quick screen methodology to identify NAMA opportunities with potential for climate financing, and a deep screen methodology to analyze and determine the most appropriate development options to meet country-specific needs. And the process has been tailored to produce NAMA Concepts and Proposals that align with the requirements of the UNFCCC NAMA registry that will open this year. The guide walks policy makers through all the steps needed to successfully develop NAMAs and demonstrate preparedness to access available funding.

The Methane Finance Study Group, upon the request of the G8, has published a report which considers pay-for-performance mechanisms for methane abatement. The analysis complements the Climate and Clean Air Coalition’s (CCAC) work on finance by focusing on an efficient method to deliver public finance to abate one SLCP (methane).

This paper highlights the implications of the current separation of the discourses on private climate finance (PCF) and on subsidies, and the opportunities that exist to unlock climate-compatible investment by linking these fields. Though climate finance aims to enable climate compatible development (CCD), this paper points out that, within developing countries, subsidies to fossil fuels (alone) currently dwarf any efforts toward CCD through climate finance.

The report reviews more than 200 public and private sector funds and mechanisms for financing projects, businesses, and infrastructure in the Asia region that mitigate emissions of greenhouse gases and thereby address climate change. The study aims to help Asian policymakers, public and private fund managers, banks, and even local communities identify ways to fund low-carbon development.

From 2010 to 2012, fast start finance began to flow from developed country exhequers. However, the climate finance paradigm is now shifting. A transition from loans and grants provided from scarce exchequer resources to innovative instruments for leveraging private capital and mitigating investment risk is required in the coming period.

Using public funds to leverage private finance is also an option being considered in allocating some of the funds channelled through the new Green Climate Fund, where a Private Sector Facility is now being developed. Whatever the source and channel of climate finance, it is vital to ensure that adequate and reliable climate finance reaches the poorest and most vulnerable people, that its impacts can be clearly evaluated and monitored, and that adequate social, environmental and human rights safeguards are in place to protect recipient communities.

This financial tool (Excel spreadsheet - click "more info" below to download) supports the framework presented in UNDP's Derisking Renewable Energy Investment report to assist policymakers in selecting public instruments to promote renewable energy investment. The financial tool calculates the levelised cost of electricity (LCOE) for a given country’s baseline energy mix and the LCOE of onshore wid energy, before and after the introduction of public instruments.

Derisking Renewable Energy Investment introduces an innovative framework to assist policymakers to quantitatively compare the impact of different public instruments to promote renewable energy. The report identifies the need to reduce the high financing costs for renewable energy in developing countries as an important task for policymakers acting today. The framework is structured in four stages: (i) risk environment, (ii) public instruments, (iii) levelised cost and (iv) evaluation.